What are Non Convertible Debentures (NCDs)?
Non-convertible debentures ( NCD ) are fixed-income instruments, usually issued by high-rated companies. They offer relatively higher interest rates when compared to convertible debentures. *1. What are Non Convertible Debentures (NCDs)?* As an investor, you are always on the lookout for improved and more sustainable schemes. Even traditional and trusted investments lose their sheen due to market volatility. In such cases, Non-Convertible Debenture or NCD has proven to be a dark horse by delivering smaller but steady returns over time. In the same line as traditional corporate FDs, NCD is also a fixed-income investment with a specific term and interest income. They are generally issued by companies to raise funds, and evidently, you cannot convert it to equities. To make up for this limitation, investors can enjoy supreme returns, liquidity, low risk and tax benefits when compared to convertible debentures. *2. Features of NCDs* *a. Issuance* Companies provide NCDs throug...